Palmerston North’s 72-room and 4.5 star rated Hotel Coachman catering to business travellers, the local wedding scene and a burgeoning provincial tourism market is now for sale with vacant possession.
When you’ve decided to get into the property management business, chances are, you’re a person who knows risk and doesn’t mind it. There’s plenty of profit to be made from purchasing your first property, but there’s also a lot that can go wrong, like these risks. When the risks go too far, though, and you aren’t comfortable navigating them on your own, it might be time to get yourself a home or apartment property management company.
Ask the same questions
As soon as you’ve identified a need for a property manager, you’ll want to develop a list of questions to ask the managers you interview. It’s really important to create a master list that you ask each property manager so you can get the same information from all of them and make it easier to compare each one to each other.
Ask questions like, how long have you been managing properties, and how many properties do you currently manage. Ask about their management style, like how they prefer to deal with late payments or common maintenance emergencies. Even more specific questions, like will they charge for new lock hardware if someone loses their keys, might help you get to know a property manager’s style and leniency a little bit more.
You’ll also want to get at what type of housing they have experience in, and ensure they’ve got solid past experience in your property type. If you’ve primarily been focusing on Cambridge houses for sale, for example, you’ll want a property manager who has experience in that area. Same goes with the type of property, as in if it’s a house you’ll be renting out, a large apartment complex, or a holiday home that you’ll need a management company for.
The income levels they are used to dealing with should also be on your question list, as you want to make sure they’re going to be able to handle higher end or lower end properties, depending on your needs. If you still need help drafting up your questions, take a look at this list here, as well as these interview questions.
It’s possible they may have some questions for you as well, such as how independent you will allow the management company to run, or what your plans are for succession of the property if something happens to you. Speaking of that, make sure you’ve got a wills lawyer available to draw up distribution of your assets just in case.
Check their work
With any big purchase, you always read the reviews, right? Same goes for handing over such a big purchase to a property management company. Review their reviews long before you ever sign a contract with them. You can do this by simply looking them up online, as well as asking around to other colleagues in the business. Obtain references as well, and contact each one to get a full picture of what you can expect. References should include other property owners and tenants too.
You could also do a little bit of reconnaissance with your potential property management company. For example, you could try calling up a property they list and ask them questions about it as a prospective tenant. This will give you an idea of how kind and prompt they are, as well as give you an inside look at their tenant screening system.
Finally, you’ll want to check their advertising products as well. Ask if they promote properties online, on print, or in other ways, and make sure you actually take a look at them. Are they using professional photos for the advertisements? Do they answer promptly when questioned on social media sites or via email? Again, you can test these things out by using a friend’s social media site or email to see what response times are like.
If you’re happy with their references and style of work, get an estimate straight away. The estimate should include what the property manager thinks they can get for renting out the property, and their approximation on the house or apartment property’s worth. That will give you an idea of the manager’s intuition and innate knowledge on the subject.
Check licenses and certifications
Find out what kind of qualifications the potential property manager has, as well as the certifications or licenses the company has in general. In New Zealand, there are plenty of courses property managers or owners can take to learn more or brush up their skills, so ask if they have these extra bonus courses under their belt, or better yet, a degree in property management.
Review their contracts
If the property management company already has a contract drafted up, you’ll obviously want to review it in full. The contract should outline how, when, and where rent is to be paid, both from the tenants and then to you as well, how the selection process will work for new tenants, and how maintenance will be dealt with. The costs for hiring the company should also be included, as well as any fees each year or fees needed to pay up front once hired.
The contract should also include who you’ll be working with and who your main contacts are. It should specify how far away the maintenance crew lives as well as your property manager. Having maintenance calls from tenants be answered in a timely fashion is one of the biggest issues with tenants, so these types of issues should be outlined clearly in the contract.
Finally, if you’re choosing a property management company in New Zealand, make sure that you’re following government guidelines when buying and renting out your property. Hiring a real estate solicitor will help you navigate these guidelines and any tax implications as well. When you’re ready to hire a property management company, have this article in hand, and you’ll be on your way to profit.
The moment has arrived! You’ve found that home that you love and can’t wait to put an offer on it. You, your partner, if applicable, and maybe even a family have envisioned a life there and have come to the decision together that this is it, this is your home.
And then, just like that, those dreams are ripped out from under you. The house has been sold before you even had a chance to put an offer on it.
This is the reality for many people in New Zealand, and across the world in highly competitive markets. Housing in many areas is literally selling before people even have a chance to see the advertisement, and the demand for houses continues to grow and grow. In New Zealand specifically, the housing shortage is at all time highs, to the point where the NZ government is actually putting some serious action into building more. Have a look at this article about the government’s housing plans if you’re interested.
Regardless of the country you live in, buying in a competitive market is really difficult and exhausting. Even harder than buying in competitive markets, is buying your very first home in a competitive market. Since you are already at a disadvantage by having less experience and potentially less knowledge than a person who has already bought a house, we’ve compiled 7 of the best tips for beating out the competition and securing your first home.
- Be prepared financially
This is by far the most important tip to securing your first home. Sellers will want to know that you’ve got all your finances in order and ready to go before they sell to you. If you don’t, there’s a metaphorical line out the door of buyers who do, and are ready to jump on the opportunity. Don’t be the complacent buyer who isn’t ready to buy at any moment.
First up to being prepared is to secure your loan. Make sure your credit score is done, and you’ve gathered your bank statements, tax documents, and other financial documents necessary to show the full picture of your financial status to your lender.
What you’re looking for is a pre approval from your lender to be able to show the seller. The final approval comes with an appraisal of the home you want to buy, so focus on this pre approval step for now. Pre approval will tell you how much money you’re going to be able to spend, which will obviously sort out houses for you quite easily by price.
When you go in to make an offer on the house, you’ll need to have all these parts of your loan ready to go, as well as have references prepared and documents in hand. Have your property law solicitor on speed dial to draw up any initial paperwork. Showing that you can move fast and are already good to go will be enticing to the seller. Make sure that you keep a solicitor conveyancing team available to help you through the paperwork of the initial offer to ensure it’s a fair and legal offer.
- Find a good agent (or multiple!)
Finding an agent is imperative to getting ahead of the normal market. Imagine this, the seller decides to go ahead and put their house on the market and contacts an agent. Before the agent can even put the security lock on the house and go back to the office to type up the listing for the online site, another agent may have already phoned their clients and set up a viewing tomorrow morning.
Find an agent that you can trust to call you immediately will get you a head start on houses that aren’t even on the market. Finding one that you can trust on top of that, and who will always give you the honest answer on the state of the home, well that’s gold.
- Consider areas you wouldn’t normally
A competitive market means that you might have to make some sacrifices on the area that you want to buy in. Seriously consider how much you want to live in that specific neighborhood, or even that specific town. Think about other options that might save you quite a bit of money, like looking at farmland for sale that you might be able to build on.
- Consider waiting, renting now
You probably don’t want to hear this one, but waiting might be your best option if prices are out of control. Consider contacting a rental property manager and see if there’s a home that fits your needs that you can rent or even lease to own.
On the other hand, you do have a slight jump ahead on those people who already have a home that they need to deal with when buying a new home. For example, they may need to consider using their old property as a rental unit, and will probably also be busy working with a rental management service to sort the old house out. Keep this in mind as well.
- Use multiple methods of communication
As mentioned, real estate agents might already have potentially sold a home before the listing is even on the internet. Because of that, you’ll want to make sure you and your agents have all types of communication to stay in touch with each other. Provide your cell phone, home phone, email, work number, and actually be available to them at all times.
- Be reasonable with prices
It is a seller’s market, and at some point you are just going to have to accept that if you want to buy now. This means accepting that you’ll be paying more money than in a buyer’s market, and more than you would like to spend in general.
- Be patient
You are about to dive in to the high high’s, and the very low low’s of the seller’s market. Whether you follow any of this advice or not, make sure that the one thing you do is remain patient, optimistic, and you will eventually find the house that fits you.
Making the decision to move is already a monumental one, but we often forget about the multiple other monumental decisions we have to make beyond just the decision to relocate. Things like, do we want to actually buy a home, or just rent or lease? Does the home need to accommodate future family plans, like adding another family member?
One of the more important questions you’ll need to answer is where you actually want to live in the first place. Choosing the right suburb to live in is a huge decision that you can’t take lightly. There’s a gamut of factors about a suburb that can truly make or break your happiness with choosing that area, so make sure you really know for certain that it’s the right one for you. To help you out, we’ve provided you with some of the most important things to think about when choosing your suburb to live in.
Renting in the suburbs
If you’re choosing to rent or lease a house or flat, you’ll most likely be working with either the owner, or a residential property management company. If you’re looking for something long term and professionally handled, you may want to stick with a rental unit that has a rental property manager running the property.
The reason for this is twofold. First, rental property management companies have more expertise in the business, and probably manage several other properties as well, making them easy to work with and have simple maintenance procedures and bond placements. Second, choosing a self run property, as in a property that is run by the owner, means that you may have to wait longer for repairs, and be reliant on them solely instead of an entire management company.
Does the suburb offer solicitor conveyancing?
Find out if the suburb you’re looking at has a conveyancing solicitor that works in that area. This is really important if this is your first home you are purchasing. The solicitor can provide help with drawing up your mortgage and providing legal advice for your title, as well as any negotiating needs you might have.
There may be different rules in different suburbs, especially if it’s a gated community or older community with set council rules. For example, houses for sale in Cambridge may request a curfew for its residents, or have strict noise ordinances, versus houses in the suburb over may be free to do as they please. This makes it even more important to have someone with the know how of that suburb to help you work through any specific rules.
Age of the suburb
The suburb you’re looking at will probably be either an established one, or a newer one with new developments and infrastructure. Decide on which you prefer before you start looking too closely at the suburb.
For example, an older neighborhood may have larger lots and plenty of older trees and other shrubbery that gives the area some character. These homes will have older amenities, but may be more unique than a brand new home in a subdivision. However, a newer development will have obviously newer and more modern homes, won’t require much, if any, renovation, and will provide a blank slate for you to build your home on.
One thing you might not be ready to think about, but should, especially if buying rather than renting, is if you are thinking of starting a family at some point. Even if that is years down the road, purchasing a house usually means that you’ll be in it for many years, so you should be cognisant of these future needs when looking at suburbs.
Find out what kind of school systems are available for that particular suburb. Use a school finder like this one to get started. Do some research on the schools and see if they are rated highly and have plenty of positive reviews from parents who send their child there. You’ll also want to look into the safety of the suburb. Use something like this website for help on reviewing suburb safety and to gauge what kind of crime is common in that area.
Another slightly scary future thing you should think about is the potential of the suburb. Part of determining overall potential is knowing the growth potential, which basically references how, when, and if the area will grow in the future. Is it a booming area where subdivisions are popping up like crazy? Or, is it established with no room to grow?
Knowing this information will help you determine what you can expect over the next 5, 10, or 50 years, and if endless construction is in your future. It will also help you know the resale value of your home as well. If the suburb is growing and plenty of new infrastructure popping up around it, then you’ll potentially have great resale value. If a new highway system or overpass is being built nearby, then your resale value might plummet. The value of your home will also affect any future refinancing needs, so make sure you speak with a refinancing lawyer to get their advice as well.
Use your intuition
When it comes down to it, the best way to figure out if a suburb is right for you is if it feels right. Take some time and go for a walk in the neighborhood. Spend an afternoon at a nearby park. Check out one of the cafes or restaurants, and really get a feel for the place. If it feels like home, and you can envision a life there, and it’s passed the previous checklist items with flying colours, it’s time to call up your real estate agent and make an offer!
Hopefully with these tips in hand, you’ll be able to buy or rent a home in a suburb that fits you perfectly. Remember that when all else fails, your suburb should be a place that has the things you need, the access to the places you want to go, and simply feels like the right one for you.
Investing in a rental property sounds like a dream come true. All you have to do is buy the place, fill it with tenants, and then see the income roll in, right? The answer to that question is both yes and no. Owning a rental property is definitely an excellent way to have a fairly passive income, but getting to that point of actually having the income, with a building full of tenants, is a lot of work. Thankfully, there’s a few basic things you can do that will get you to your first property and on your way to earning that income.
– Find the right realtor
Step one, before you do anything else, is to find the right realtor. You certainly can try and find property for sale on your own, and attempt all the research, inspections, negotiations and closing, but be prepared for an incredible amount of work. It is certainly possible, but the process is infinitely easier when you have an experienced realtor to work with. Check out these tips for finding a realtor to get you started.
For one, your realtor will most likely have better negotiation skills than you. They’ve been doing this for a while, and know how to talk a price up, or down. They’ll also know what prices ought to be for that neighborhood, and have access to a wealth of information about the types of homes and buildings in the area. This gives them more power when negotiating than the typical buyer on their own.
Realtors will know prime property for sale sooner than the general public, sometimes knowing when property is for sale well before it is posted. This can give you a leg up when searching in popular and fast selling neighborhoods compared with looking yourself.
– Consider a rental property manager
Another common misconception of owning your own rental property is how easy it would be to manage it. It’s tempting to assume that once you’ve got everything set up, all you need to do is collect rent cheques and fix the occasional leak or crack. But, you’ll need to ask yourself if you’re really ready to be a landlord and prepared for the work involved.
If you’re a hands on type of person and love fixing things yourself, and if you have time to spare to visit the rental property often, this could be a perfect venture for you. However, for most of us, hiring a trustworthy rental property manager is the way to go.
Property managers can handle the entire rent collection process, tenant screening, maintenance and upkeep. They’ll also be able to do the dirty work of evicting tenants if needed, or charging late fees on late rent payments. This means that you can truly sit back and enjoy the profits of your property, while allowing you time to enjoy your life or continue working in your career.
When it comes time to fill your property with tenants, rental property managers shine the most. They specialise in this, which means that they most likely have a solid system for screening tenants and finding good fits for your space. They also are able to market your property much better than you could on your own, as they have not only the experience, but the market presence and reputation behind them. Rental property managers add a buffer between you as the owner and the tenants, which means they can more easily enforce the rules regarding rent and the unit. This means they will have more success with keeping rent cheques flowing in and the state of the flat in good shape.
– Consider your neighborhood
When you’re deciding on property, considering the neighborhood that you’re looking at is vital. For one, make sure you know what other rental properties in the area are charging for rent. This can help you gauge what kind of income you can expect, and if that matches up with what you’ll be paying on the building.
Also consider the type of tenants you’ll have in the building. Are you looking in a neighborhood near a university? Or are you looking in the suburbs in a primarily house driven neighborhood? These kinds of questions will help you find out if your tenants will be long or short term, and what you may expect in maintenance.
– Upkeep and renovation
One final thing to consider before buying is how much work you’ll need to put into the property. Are you purchasing a fairly new building that is already outfitted for tenants? Or, will you need to fully renovate your building? The first will naturally be an expensive investment, but the latter the longer one and more hands on.
Regardless if you choose a new or old building, an incredibly important way to help you mitigate the risk of buying an existing building is to get a full building inspection. Make sure your inspection upon buying the building includes a full walkthrough of the entire building, as well as the outer walls and roof of the complex. This will give you a good idea of what to expect with repairs or renovation.
You’ll also want to think about how much your costs will be after each tenant. If you predict that your tenants will be short term and switching out every lease term, it’s possible you will need to replace appliances, lights, carpeting, etc. more often than if you had long term renters. You may also need to invest in carpet cleaning or professional cleaning to keep your units fresh between each tenant. Longer tenants can also rack up repair costs, so regardless of your length of renters, make sure you’ve set aside money in your annual budget for these costs.
With keeping these tips in mind prior to buying, you’ll have an excellent chance of succeeding in your rental property ventures. Remember that you don’t need to do everything yourself, and things like property managers and inspections can seriously save time and money in the long run, making your entire experience a great one!
Owning your own rental property is a slightly overwhelming goal. Not only is the work as a rental property manager difficult, but getting to that point of finding, buying, and managing your property is an incredibly difficult process on its own.
With that said, however, it’s certainly not impossible. Look around your neighborhood, or maybe your general area of town. There’s most likely at least a handful of apartment buildings, rental homes, or large rental complexes in your area. All of them are managed in one way or another, and need people like you who want to pursue this as a career.
But how do you jump from nothing, to owning a rental property? And how can you ensure that you make a profit and continue to profit for years to come?
- Start your research
Even if you’re nowhere near ready to own a rental property, you can still start your research now on where, what, when, and how you’ll purchase a property in the future. It’s extremely important that you know as much as possible about the neighborhood you’re thinking about purchasing in, as well as what your budget is for purchasing, and what kind of income you’re expecting.
First, you’ll want to take a look at your finances. Start with writing up what your current expenses are, listed out in detail, along with whatever money you are able to put aside for savings. This will help you build the framework for a budget that you’ll need before starting to look at property. Many rental properties will require around a 20% down payment, so your budget can help you figure out how to raise those funds. Take a look at these other helpful hints for saving the money for more ideas.
Once you’re on your way to saving the money, or if you’ve already reached your goal amount, you absolutely need to research the neighborhoods you’re considering purchasing in. Your research should be twofold; first, find out what different kinds of property sells for in the area. Next, determine the average rent that renters pay for that area. Knowing how much you’ll be able to charge for rent is partly based on the market for that area, and also based on the worth of the property you’re renting out.
- Find the right real estate agent
Finding property for sale on your own is certainly possible, but you’ll have a lot more luck and an easier time in general by finding a real estate agent to help you. One of the reasons it’s tempting to find your own properties to look at is to avoid the cost of hiring an agent. While the commission you’ll be paying an agent can cause your pocketbook a little pain, remember the benefits of having an agent on your side, like having access to listings before they go public, and having all the data to easily compare prices and market values.
Finding an agent you trust can help you multiply your property in the future as well. Once your agent has secured your first property for you, and you start to see profits and are looking to expand, you already have a person in place who knows what you’re looking for and has already developed a relationship with you.
- Start small
If this is your first time purchasing rental property, let alone any real estate in general, you’ll want to start small before jumping to the top of the rental property ownership food chain. The property owners and managers that own large complexes or multiple properties all over a city most likely didn’t start like that originally. They slowly built up from humble beginnings into the empire they have now.
So, don’t be discouraged when perhaps you need to start with just renting out a small house to a family, or even renting out a room in your own home. This experience will be invaluable to you, and can help you work through any mistakes or issues you have along the way, as well as giving you experience with keeping a tenant satisfied and happy.
Whether you plan on being the rental property manager yourself, or hiring someone out to do the job eventually, you should still know at least the basics and be willing to step in when needed, which brings us to number 4, below.
- Be prepared to do the work yourself
Part of owning a property is being prepared to get your feet wet in repairs, remodels, and general upkeep. While eventually you may be able to hire all these tasks out, as a new property manager you’ll more than likely need to step in and get the job done.
Rental properties require basic maintenance at all times, such as mowing the lawn, painting and cleaning in between tenants, and general upkeep and tidying the property. To save yourself a lot of money, you may want to take care of these jobs yourself, and possibly try and take on some of the bigger jobs like general home maintenance as well. Consider taking some local classes on repairs, and for the larger ones that require more expertise, you’ll want to find a professional who you can have a lasting relationship with to call on when needed.
Climbing the property ownership ladder can be a long climb, but a very fulfilling and lucrative one. For many people, the top of the ladder is owning the property, utilising a rental property manager to run the property for you, and having the property paid off so you can simply collect fairly passive income. But, this is only possible if you follow the steps listed above.
Take your time, do more research than you think you ever need to, and find a circle of professionals like your agent, property manager if applicable, and maintenance staff, and you’ll be on your way to the top of the ladder in no time.